Randomness in Tax Enforcement

24 Pages Posted: 28 Jun 2004  

Suzanne Scotchmer

University of California - Department of Economics ; School of Law, University of California, Berkeley; National Bureau of Economic Research (NBER)

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Date Written: February 1988

Abstract

For most parameter values, increased randomness about how much taxable income an auditor would assess leads to higher reported income and more revenue, When reducing randomness is costly, optimality requires some randomness in assessed taxable Income. Even if reducing randomness g costless, taxpayers may prefer some randomness when the increased revenue can be rebated, so that the government a revenue stays fixed. These results do not rely on the presence of a distortion in labor supply.

Suggested Citation

Scotchmer, Suzanne and Slemrod, Joel B., Randomness in Tax Enforcement (February 1988). NBER Working Paper No. w2512. Available at SSRN: https://ssrn.com/abstract=425546

Suzanne Scotchmer (Contact Author)

University of California - Department of Economics ( email )

Berkeley, CA 94720-3880
United States
510-643-8562 (Phone)

School of Law, University of California, Berkeley ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
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National Bureau of Economic Research (NBER)

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Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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